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SUPPLEMENTARY ADDRESS 

TO THE 

People of the PJnited ^ tates. 

-S awttiL • v'W d -—•> 

In the articles and pamphlet which I have heretofore written 
on the currency question, I have endeavored to discuss it in a 
plain, practical manner, such as will commend itself to the 
ordinary business man, and in the light it should be contem¬ 
plated by the entire American people, whose interest it should 
be the province of the legislative department to promote and 
of the executive department to protect. 

I said in the pamphlet alluded to that money is the acknow¬ 
ledged lever that moves the world; if rightly employed it will 
move it in the right direction — if wrongly, otherwise. I en¬ 
deavored to show that gold and silver are both money — and 
that these alone constitute money. 

The moment we travel beyond the precincts of barter , in 
exchange of commodities, we must necessarily have some 
acknowledged measure of value, which is known as tnoney. 
Gold and silver have, in all ages, been accepted, by all nations, 
as money. There have been temporary exceptions, such as 
iron, by the Lacedaemonians; copper, by the Romans; shells, 
beads, etc., by barbarous nations; but these have been aban¬ 
doned, not possessing the requisites which humanity demands 
to meet commercial necessities. To constitute money, there¬ 
fore, some commodity must be found that possesses the requi¬ 
sites thatwould entitle it to be accepted by all as money. These 
requisites are: i. That it should be susceptible of divisibility, 
without loss or injury, into the smallest portions. 2. That it 
should admit of being kept for an indefinite period, without 
deterioration. 3. That it should, by possessing great value 
in small bulk, be easily transported from place to place. 4. 
That one piece of money, of a certain denomination, should 
be equal in magnitude and quality to every other piece of 
money of the same denomination. 5. That its value should 
b£ steady, or as little subject to variation as possible ; and, con¬ 
sidering upon what principles values are estimated, perhaps a 
sixth should be added, viz.: That it should be susceptible of 
being manufactured into articles of ornament or use, pleasing 
to the eye or gratifying to the taste. Now, gold and silver only 
possess all these requirements to constitute money. Diamonds 
and other precious stones are more valuable than gold or silver, 
taking the same bulk into consideration, but they can not be 
divided without loss, and when broken their original value is 




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destroyed. Platinum, though susceptible of divisibility and 
equally as indestructible as gold or silver, can not be manu¬ 
factured into articles of beauty, that please the eye and gratify 
the taste. Iron and copper, though really convertible into 
articles that meet the wants and necessities of mankind, yet are 
destructible and too ponderous to be used as money. In the 
exigencies of nations, they have been compelled to issue prom¬ 
ises to pay gold and silver , and even compelled by legislative 
enactment, or autocratic power, to accept these promises as 
money. Such promises have, however, been purchased by the 
possessors of gold and silver, at great depreciation from their 
nominal value; at such prices as the supposed ability or ina¬ 
bility of the makers to redeem them. That these pro¬ 
mises to pay money were not money, was abundantly shown 
by the prices at which they were disposed of, and that gold and 
silver only are money is made equally certain by being the 
measure of value at which these nominal dollars were sold. If 
bonds and greenbacks are truly money, why do they fluctuate ? 
and why were they not received at par universally ? and why 
are bonds to-day bearing 6 per cent, interest, worth more than 
gold or silver? The history of the last ten years will afford 
all the answer required. I am aware that writers on political 
economy have asserted that gold and silver are not the true 
me^ure of value, because at one time they will purchase more 
or less of other commodities than at another. Though this 
position, at the first glance, appears plausible, is it therefore, 
necessarily true ? Gold and silver are at all times intrinsically 
the same. The amount of gold and silver in the world is the 
measure of value of the property in the world, and will remain so 
as long as values are estimated by the human race as they now 
are ; because, though there may be relatively more or less gold 
and silver than of other commodities at one time than at another, 
still they are the measure by which the other commodities are 
estimated, just as much at one time as another. 

Commercial transactions in this age are world-wide, and no 
single nation has a right to disturb the established usages that 
the experience of thousands of years have recognized and 
adopted. Previous to the discovery of America, silver was 
relatively much more valuable, as compared wiih gold, than 
since the opening of silver mines on this continent. It is not 
my purpose to cumber this article with the valuation of the 
precious metals by other nations to any great extent, but it will 
be instructive, and interesting in a limited way to refer to the 
action of England, and allude to the practice in France. In 
England, both metals were legal tender from 1257 to 1664. 
The value of gold however, was regulated by proclamation, it 
being ordered that gold coins, then current, should be equiva¬ 
lent to specified sums of silver. From 1664 to 1717, silver was 
made the only legal tender, and gold-coins fluctuated there as 


silver now does both in America and England. If both gold 
and silver coins are made legal tender, it is quite obvious that 
their values, with respect to each other, should be fixed bylaw, 
else the increased production of one over the other will change 
their relative value,,and the overvalued one will be the currency 
used in making all payments, and consequently become the sole 
or nearly sole currency of the country, as we have seen verified 
here and in other nations. Previous to the war the standard 
silver dollar contained 371^ grains of pure silver, and was in¬ 
trinsically worth more than the standard gold dollar, conse¬ 
quently gold, being the inferior metal in value, relatively, 
became the principal currency in payment of coin debts, as was 
the case in England in 1717, when it was fixed that the guinea 
should be equivalent to 21 shillings in silver. Previous to that 
time, and during the greater part of the 16th century, silver 
continued to increase in its relative value to gold, and when a 
guinea was made equivalent to 21 shillings in silver, gold was 
overvalued to the extent of per cent., and the effect was, 
as Liverpool on Coins, says, “that the advantage of payment 
“ in gold, in preference to silver, became more decided, and 
“ ultimately led to the universal use of gold in all large pay- 
“ ments, and to the fusion or exportation of all silver coins of 
“ full weight.” In France a different valuation of the metals 
had a different effect. Previous to the recoinage in 1785, the 
Louis d’or was rated in the mint proportion at only 24 livres, 
when it was really worth 25 livers 10 sols. Those, therefore, 
who should have discharged the obligations they had contracted, 
by payments of gold coin instead of silver, would plainly have 
lost one livre and 10 sols on eve-ry sum of 24 livres. In con¬ 
sequence, very few such payments were made. Gold was 
almost entirely banished from circulation, and silver became 
almost the only species of metallic currency used in France — 
as we are informed by Say, in his treatise on political economy. 
In England, in 1816, a new system was adopted, and by an act 
in the reign of George III, gold coins only we e made a legal 
tender in all payments over 40 shillings. The pound of silver 
bullion that had previously been coined into 62 shillings, was 
coined into 66 shillings ; and under these regulations, silver has 
ceased to be a standard of value. From 1344, during the reign 
of Edward III, silver was valued in England about 1 to 12, 
and continued to be estimated at nearly the same rate until in 
the reign of Henry VIII, it was valued at 1 to 5, at which esti¬ 
mate it however only remained for a few years. In the latter 
part of the reign of Edward VI, or of Mary I, it was restored 
to about the standard that it had maintained for over 200 years; 
varying during that period but little from that of 1 to 11, until 
in the reign of James I, when it stood 1 to 12. In the latter 
part of the reign of Charles, it declined to 1 to 14; and in the 
reign of George I, it still further declined to 1 to 15.2, at which 


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ratio, with very little variation, it has remained to the present 
time. 

In this connection it may not be inappropriate to state 
the s'atus of different nationalities or governments, as to silver 
and gold as legal tenders in payment of debts. At present 
silver is a legal tender in eighteen different governments or 
nationalities, viz: China, Russia, India, Austro-Hungary, 
Persia, Peru, Mexico, Colombia, Tunis, Argentine Republic, 
Costa Rica, Ecuador, Farther India, Guatemala, Honduras, 
San Salvador, Tripoli, and Nicaragua. These contain a popu¬ 
lation of about 837,000,000, to which if we add those ten na¬ 
tionalities that make both silver and gold a legal tender, to wit: 
France, Spain, Italy, Belgium, Netherlands, Bolivia, Algeria, 
Switzerland, Greece, and Cuba, containing a population of over 
100,000,000 — making altogether a population of over 937,000,- 
000, whence out of the entire population of the globe, being 
estimated at a little over 1,260,000,000, we have about three 
quarters of the whole who use silver, or silver and gold, as 
legal tenders in payment of all debts. If we take the sixteen 
governments that adopt gold only as a legal tender, viz: Ger¬ 
many, England, Turkey, Japan, United States, Egypt, Brazil, 
Sweden, Portugal, Norway, Denmark, Chili, Australia, Canada, 
Liberia, and Hawaiian Islands—several of which are mere 
dependencies upon the nations of which they constitute a part, 
and altogether comprising but about one quarter of the popu¬ 
lation of the globe, we shall see with what little propriety the 
attempt is made to render gold the sole standard of values. 

In my previous articles, I have said that this plan of demone¬ 
tizing silver was not purely or mainly of American origin. 
The plutocrats of Europe are not only holders of American 
bonds to a large extent, but also holders of other national 
indebtedness, which, if payable only in gold, would necessarily 
greatly increase its value, but they are also owners, to a very 
large amount, of mortgages upon American railroads, and 
other railroad indebtedness. This railroad indebtedness was 
unproductive. The roads had been built at an expense nearly 
or quite double what it would now cost to construct them. 
The American capital used in their construction, had all, or 
nearly all, been sunk; the roads had become unproductive in 
consequence of the general stagnation in business; and the 
American directors, seeing that the roads would soon pass out 
of their hands unless the expenses of conducting them were 
greatly reduced, began cutting down wages of employes and 
reducing them greatly below what they had formerly received, 
and probably relatively much below what should have been 
awarded them in comparison with salaries of officials. The 
total cost of railroads now in operation, is computed to be over 
$4,000,000,000. Allowing only one quarter of this amount 
to have been furnished by foreign capitalists, we shall have 


5 


$1,000,000,000 of railroad indebtedness against us, paying a 
much higher rate of interest than our national debt, but which 
was unremunerative to..these capitalists. 

By depressing values greatly, the possession and control of 
these roads would soon pass into the hands of those European 
plutocrats, and this was one of the strongest reasons that sent 
Ernest Seyd with his $500,000 to this country to procure the 
passage of the law demonetizing silver. I will not say, as some 
have said, that this money was used to bribe members of Con¬ 
gress, or that the law was surreptitiously passed under a miscon¬ 
ception of its effect, as Senator Kelly alleges; or by a misstate¬ 
ment by Mr. Hooper to Mr. Holman, that it did not affect the 
coinage system of the country; but I do distinctly charge that 
it was enacted with the purpose of placing the money power in a 
condition to control the producing classes. That the late riots on 
the railroads are traceable to this depreciation of values I 
think none will deny, and therefore the great destruction of 
property and loss of life are the results of that law, and should 
have been foreseen by those who were instrumental in its 
passage. Had the attempt been the simple restoration of the 
constitutional standard of gold and silver, at the earliest 
practicable period, the depreciation would have been gradual; 
capitalists would have known the real value of their money, 
and would have been ready to invest it accordingly; but fear¬ 
ing the repeal of the law, it was withdrawn from all the ordinary 
business pursuits, and employed in speculating transactions, 
thus deranging the entire production, throwing out of employ¬ 
ment the laboring classes, and thus diminishing the real wealth 
of the nation to the amount of untold millions annually. 

To comprehend the motive that induced the enactment of 
the law demonetizing silver, it will be sufficient to see its effect; 
and that it could have been passed without a motive no one 
will pretend. It benefited the owners of gold, and the owners 
of our bonds, and the benefit to these must have been immense, 
or the plan would never have been devised and carried out. 
To the extent that it benefited one class, to the same extent it 
injured another. The one class is the few American bond¬ 
holders, and the plutocrats of the old world — the other is the 
whole^American people. That it was not necessary or beneficial 
to any one but those named must be apparent to all. The 
property of the world, instead of being undervalued, was esti¬ 
mated at more than four times its real value, taking gold and 
silver used as coin, as the measure of value. Unitedly, the 
amount is supposed to be less than $12,000,000,000, and the 
national debts alone amount to over $23,000,000,000, while other 
indebtedness must vastly exceed this almost incredible amount. 
Individual indebtedness may, and often is,'liquidated by ex¬ 
changes, without requiring coin payments to any great extent; 
but national debts can only be canceled by repudiation or 


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payment in coin, so that instead of reducing the amount of 
coin to the gold standard of $6,000,000,000, or thereabouts, it 
ought to be increased to double that of the gold and silver 
united. That either gold or silver will, or can be demonetized 
by common consent of the nations of the earth, does not 
appear to me possible, constituted as mankind now are. If 
either could be spared, it should be gold ; because the loss by 
abrasion would be much less, and gold can not be used in all 
the ordinary transactions of life, with as much convenience 
and economy as silver. The great problem to solve is to 
establish the true relative value of each, with regard to the 
other, and so establish it that the world will recognize it as just 
and right. Neither metal should, by operation of law, be 
inferior to the other. We have seen that in England, by the 
law of 1717, gold was made the inferior, and the consequence 
was, silver of full weight was exported or fused; while in France, 
in 1785, exactly the reverse took place. 

In alluding to the indebtedness to foreign nations for the 
money furnished for construction of our railroads, and the 
probable motives which induced those capitalists to seek the 
demonetizing of silver by America, I would not, by any means, 
condemn them. They are perfectly justifiable in making every 
effort in their power to secure the payment of their debt, and 
if it should result in placing this vast chain of railroads in the 
hands of foreign capitalists, it would probably be at a cost of 
less than half the money expended in their construction, and 
hence they would be able to continue them in operation much 
more economically, and at the same time furnish a fair interest 
on their investment, as well as secure the ultimate payment of 
their debt. For many years it has been my greatest fear that 
the railroad interests would combine and monopolize the 
’ carrying trade—demand from the people such extortionate 
charges for conveying the agricultural products to market as 
to render the labors of the farmer and the productions of the 
soil entirely unremunerative; but since our courts have so 
modified their decisions in regard to the vested rights of these 
corporations that these roads, in some sense at least, are 
treated as highways, and the managers as common carriers, 
my fears are mainly dissipated, and under this view of the sub¬ 
ject I can see no serious objection to these roads passing under 
the control of foreign capitalists. 

It is not to be presumed that the European capitalists or 
American bond-holders, when they procured the passage of 
this law, intended to produce this result; but would not a 
thoughtful tracing from cause to effect have admonished them 
that such would be the consequence ? That it has been is 
now apparent. In a late speech of Judge West of Ohio, he 
has brought out very clearly the necessity of adjusting the 
rights of capital and labor, so that each may enjoy what justly 


7 


appertains to them without impairing those belonging to 
the other. But to accomplish this the old adage that “ might 
gives right,” must be reversed or lost sight of. Nations have 
been aptly compared to the human frame, and in past ages the 
lesson has been taught that all parts should act in harmony 
and concert to render the whole useful and efficient. St. Paul 
teaches us in Cor: i, chap, xii, that all parts are ^necessary to 
constitute a perfect body, and that each member should care 
for the other; and Livy informs us that when a portion of the 
Roman people became refractory, Agrippa brought them to a 
true conception of their condition by showing them that if the 
hands failed to supply the stomach it could not perform 
the functions required of it, and the whole body would perish. 
Capital and labor are essential parts of the body politic, and one 
can not act in opposition to the other without paralyzing or 
destroying the efficiency of the whole. 

Labor alone produces wealth , and wealth acquired by any means 
but honest industry is a step toward moral wrong that soon ends in 
evils of great magnitude. By the term labor, I would not be 
understood ag intending to limit it to mere brute power. If by 
thought, mechanical combinations can be effected, and natural 
forces employed, so that by one man’s hands as much can be 
accomplished as would otherwise require hundreds to perform, 
the man that so uses his thoughts is a laborer of the highest 
merit, and justly entitled to the amplest reward of his labors. 
England, by acting upon this principle, has placed herself in 
the high position she now occupies among the nations of the 
earth; but in the onward march of the world’s progress, the 
nation that to-day sways dominion is superseded by another 
to-morrow. From Egypt to Assyria, from Assyria to the 
Medo-Persians, from thence to Greece, to Rome, to Venice, 
Turkey, Spain, Holland, and the divided nationalities that are 
now struggling for supremacy; but in all probability will end 
in so wasting their energies and powers, that within the next 
fifty years the Continent of North America, and the surround¬ 
ing islands, will, from common interest, unite in a common 
government, where the wealth of the world will concentrate, 
because the producing class will possess, untrammeled, the 
elements to supply the necessities of the commercial world 
more cheaply than any other portion of it. In the next twenty 
years our gold and silver mines will supply material to liquidate 
our national debt, and in all probability the balance of trade 
in our favor will wipe out all other indebtedness to foreign 
nations, while the greater part of the national debt will remain 
in coin in this country, on which to base our circulating 
medium in future years. 

A well regulated monetary system is required to conduct the 
commercial transactions of the country in a successful and 
suitable manner, and this can be most conveniently done 


8 


through safely organized banks. I have heretofore said that, 
with some slight exceptions, we have the best organized banking 
system that could well be devised. The bill-holder is secure 
against ultimate loss in such currency as is now used in liquida¬ 
tion of debts not specifically payable in coin. The only defect 
is that it is not payable in specie, and this defect should be 
remedied at the earliest practicable period. Therefore to render 
greenbacks equal to gold is the problem to be solved. To issue 
bonds for the amount would necessarily involve us in a debt to 
foreign nations for the gold obtained, which would be to impose 
an unnecessary burden that might, in the future, be difficult to 
remove, while it would, at the same time, lessen the currency of 
the country so as to injuriously affect its business operations, and 
would, to some extent, unnecessarily depress values. To avoid 
this I repeat a former suggestion, viz.: to issue 3.65 interest-bear¬ 
ing scrip in small denominations—say $10, $20, and $50—which 
should be placed in the hands of proper officers of the govern¬ 
ment, so that all could enjoy equal privileges in obtaining it 
in lieu of greenbacks. This would make a currency more 
valuable even than coin, for while it is held it wquld advance 
in value, and at this juncture, when savings banks are failing, to 
afford the pieople the security they require to protect them¬ 
selves from the loss of those savings, that by industry and 
economy, in their manhood and health, they had been enabled 
to provide against sickness and old age. It would provide the 
very class that most require protection with that which they 
most need —security against loss of that which had been 
obtained with such commendable prudence and forethought; 
besides it would interest the very class most desirable to in¬ 
terest in maintaining the government and providing for the 
honorable fulfillment of our national obligations, and saving us 
from any fears of future oppressions from the plutocrats of the 
old world. 

The 3.65 certificates should be convertible into bonds bear¬ 
ing the same rate of interest, payable in coin, at a period 
beyond that of any present indebtedness, so that at as early a 
day as possible the rate of interest paid on our national in¬ 
debtedness should be reduced to as low a standard as that of 
any other nation. 3,65 would be lower than any nation now 
pays, except England, and there is no legitimate reason why 
we should pay a higher rate than Great Britain. It does* not 
appear to me advisable that, when thi/s scrip shall have been 
converted into bonds, they should be reconvertible into 
scrip at the pleasure of the holders, because if coin is retained 
in the country, the annual product of our mines will be ade¬ 
quate to meet all the increased demands for currency that the 
increasing business of the nation may require, and the privi¬ 
lege of converting and reconverting them at pleasure would 
place it in the money power to increase or depress values as 


9 


its interest might prompt. In the issue of 3.65 interest-bear¬ 
ing certificates to redeem the greenbacks, it appears to me that 
it should be done gradually, so that the laboring classes might 
be enabled to lay it away in small sums, instead of depositing 
it in savings banks, or laying away specie that would not in¬ 
crease in value, and also because the present use of greenbacks 
would save the nation interest by spreading the time of con¬ 
version over a term of years. 

In order to facilitate a return to specie payment, it might be 
advisable to issue, say six millions, monthly, during the year 
1878; and thereafter, say four millions, monthly, until the entire 
amount is converted into coin scrip, bearing interest at 3.65 
per cent. While this would not reduce the circulating medium 
so .as to depress values greatly, it would virtually be placing in 
circulation currency to that amount quite equal to coin ; allow¬ 
ing the balance of trade in future to be no more in our favor 
than during 1876, which, according to present indications, is 
far below what it will be; it will considerably exceed all foreign 
demands upon us for coin, and allowing the product of bullion 
from our mines to continue the same as the last year, which was 
about ninety millions, and computing the specie to have been, 
on January 1, 1877, one hundred millions, then during the year 
1877, there will have been paid the banks in gold about sixty 
millions for interest on bonds held in this country; there would 
be in coin, on January 1, 1878, about two hundred and fifty 
millions, so that under ordinary circumstances it would be safe 
for the banks to resume specie payments at the commencement 
of the year 1878 ; but inasmuch as it is better not to attempt 
resumption until the nation is fully prepared to do so on a basis 
that can not be shaken or overturned, it will be best to wait 
until the mineral products of 1878 are added, and the banks 
should be further fortified by the reception of the sixty 
millions of interest on their bonds which will give over 
four hundred millions of coin to redeem about three hundred 
and thirty-eight millions of bank notes. 

The gold and silver from our mines must be obtained by 
labor; the cotton, grain,'oil, and other agricultural products 
must all be made available by labor; the manufactures that 
find market in the old world must be produced by labor; and 
to render all effective, capital must be judiciously employed, 
so that all the members of the body harmoniously co-operating, 
its vital energies will be brought into the most efficient action 
possible. The banking system of this country must be sus¬ 
tained on virtually the same basis that it is now established, 
yet it should be relieved from some of the burdens which it at 
present bears. To accomplish this the bonds deposited with 
the government, now worth in gold about 20 per cent, premium, 
could be sold for bullion, and the bullion held in security for 
the redemption of the notes in circulation, in the same manner 
as the bonds are now held, but inasmuch as the deposit would 


10 


be in coin, the whole value of the coin should be issued to the 
banks, by which they would obtain about 20 per cent, more 
circulation than they now possess, which would amount to over 
sixty-five millions of dollars—allowing the bank note circulation 
now o be about three hundred and thirty-eight mill ons. 
Should the bonds now in deposit with the government remain, 
they would gradually depreciate, until at maturity they would 
only be at par, causing the banks to lose the 20 per cent, 
premium that they now bear. 

In regard to the bullion to be purchased with the bonds, it 
need not be coined into dollars faster than it was required to 
redeem the bills, and which probably would not be needed, 
unless the banks should fail,-or specie payment"was suspended; 
the latter event never occurring if wise legislation is now 
adopted. Laws should be enacted to prevent the export of 
bullion, and America is now, or very soon will be, in a position 
to dictate to the world the relative values which, as-coins, 
should be affixed to gold and silver—whether 15 or to 1 — 
by a concert of nations could be determin d which was the 
proper and just basis. The conversion of silver to the various 
articles into which it is manufactured, would absorb so much 
of that which the old world now possesses, that of necessity 
they would seek a supply from America; and the few nationali¬ 
ties that now use the gold standard only, would find it to affect 
them so injuriously to depress values to that standard, that 
they would soon return to the bi-metallic currency. We have in 
this country, from necessity, adopted a paper money system, 
and found it so convenient in the transaction .of business, that 
we only require to render it secure against fluctuation and loss, 
in order to adopt it for all large business transactions, and to 
render it thus secure, it should become the true representative 
of the number of grains in gold or silver which by law consti¬ 
tutes the dollar that it purports to represent. Comparatively, 
but small amounts would be required in the ordinary transac¬ 
tions of life, and but little loss would be sustained by abrasion, 
as the gold and silver would seldom be removed, except in 
large amounts, and in such cases the abrasion would be very 
light. Formerly, our banking operations were conducted on 
an irresponsible currency, and the country suffered losses by 
exchange, stmnp tail currency , and such other devices as specu¬ 
lators could concoct by which to defraud the people. About 
once in ten years, by flooding the country with an irresponsible 
currency, property could be disposed of far above its real value, 
then the currency would be withdrawn, or the banks fail, and 
the vendor would get back his property at half what he sold it 
for, and then be in a condition to verify the speculator’s maxim : 
“ buy cheap and sell dear” or “sell dear and buy cheap" which 
ultimately produces the same result. 

To avoid all fluctuations in values, except such as arise from 


11 


natural and unavoidable causes, it is absolutely necessary that 
we should have a currency founded on the metallic basis only, 
or one that gives full assurance .that what is received as cur¬ 
rency should be convertible into gold and silver without delay 
or loss; and therefore it is essential that in establishing the 
financial affairs of the country, at the present time, no bank 
notes should be received as currency, except those that repre¬ 
sent coin, or are based on government security equal to coin. 
It is of little consequence whether it be gold or silver, or both 
united, for they are and always will remain the measure of 
value of all other commodities; but as both are productions of 
the country in about equal proportions in value, and both are 
required in order to obtain the amount in coin adequate to the 
necessities of the nation, it follows that the bi-metallic standard 
is that which should be adopted. Let it be borne in mind that 
all changes in value, not produced by an increased production 
of gold and silver, are changes brought about to benefit capi¬ 
talists by gambling operations, and are necessarily to the injury 
of the producing classes. They add increased wealth to the 
money power Without being produced by honest industry, which 
I have before said, is wrong in principle, and a step toward 
greater moral evils. If our currency is now founded wholly on 
„ a specie basis, capital can not be employed safely for specu¬ 
lative purposes, and will necessarily seek employment in co¬ 
operating with labor, in all productive pursuits. All stocks and 
corporate privileges will soon prove their true value, according 
to their productive capacity; and Bulls and Bears will be 
utterly powerless to affect their value. These terms will become 
obsolete in financial transactions, and known only to the histo¬ 
rian in describing the gambling operations of former days. 

Capitalists, being compelled to seek safe, legitimate employ¬ 
ment for their money, will be satisfied with investments that 
assure but a small increase beyond the interest paid on our 
national indebtedness ; and, as the assurance is now manifest 
that our national obligations, for principal as well as interest, 
will be met according to the terms of those obligations more 
certainly than those of any other nation, it is reasonable to in¬ 
fer that all the- business operations of the country will be 
carried on more safely and economically in the future than in 
the past. Heretofore we have had an irresponsible fluctuating 
currency, causing great fluctuations in the price of all products, 
as well as of the labor necessary for their production. But 
when a stable currency is secured, correct estimates of value 
can be more readily and accurately ascertained, and all busi¬ 
ness pursuits followed more securely, because the result may 
be comprehended with more certainty. The American manu¬ 
facturer could not successfully contend with his foreign com¬ 
petitor because the price of labor, estimated upon an irresponsi¬ 
ble fluctuating currency, was much higher than it would be on 


12 


a stable metallic basis; hence, a protective tariff must be 
brought to their aid. When interest is reduced to as low a 
standard in this as in other countries, and capital ceases to be 
employed in speculating enterprises, and finds its legitimate em¬ 
ployment in aiding the producing classes, then, and not till 
then, can American manufacturers successfully compete with 
other nations. 

It was my purpose to have referred, at some length, to the 
allegations often made that injustice would be done the bond¬ 
holders should they be paid in anything but gold, but I see 
that the question has been more ably presented than I could hope 
to do it, by Hon. Thurlow Weed in a communication under 
date of Aug. 15, 1877, addressed to the New York Tribune, 
which I commend to all who desire a full knowledge of the 
subject. I will content myself by simply saying that the aver¬ 
age premium on gold from Nov. 1862 to Dec. 1868 was over 
70 per per cent., and that the bonds were mainly issued during 
that period. I will, therefore, to show the injustice of this 
allegation, suppose a loan was made at an average date, Nov. 
1865. of one hundred dollars in gold, which would purchase 
one hundred and. seventy dollars in bonds, bearing 6 per cent, 
interest, payable in 20 years from date ; on this bond the in¬ 
terest received on the one hundred dollars investment in gold, 
would be over 10 per cent. ; the bond having already run 12 
years would produce to the lender $120 in gold; the present 
value of the bond' is 20 per cent., above par, which would give 
the owner $204 in gold, making $324 besides the interest on 
the $120 already received. One hundred dollars in gold 
loaned at 6 per cent, and payable in gold would have produced 
in 12 years but $72 and would only be worth $100 in gold at 
this time, unless the difference in value of a bond bearing 6 per 
cent, interest land having eight years to run, and one bearing 
4 y<2, per cent, interest and having the same time to run, which 
would not be over 12 per cent, and usually less. The gold 
bond would have produced but $72 in 12 years and would sell 
at the highest valuation for but $12 premium, which would 
make it worth at the present time, interest included, $184 
instead of $324—a clear profit of $140 besides, the use of the 
difference between the interest at 6 and 10 per cent. If the 
Plutocrats of Europe have invested 700 millions in American 
bonds they have made a clear profit of 980 millions, besides a 
return of their capital with 6 per cent, interest If the foreign 
bond holders who hold 700 millions of our bonds have made a 
clear profit of 980 millions beyond a fair legal interest, I leave 
the reader to infer what has been the profit to the owners of 
1000 millions held in America. If it were possible to pay them 
in the most depreciated kind of currency that we have ever seen, 
it would be more than justice ; and yet their greed is such that 
they desire to be paid in gold at twice its actual intrinsic value. 



IB 


Our government is a government of the people, organized by 
them for the promotion and protection of their rights. Our 
Legislators are selected to represent the people, and enact laws 
for the benefit of the whole, and not for any particular class, 
to the injury of another equally or more important class. In 
their representative character, they, for the time being, lay aside 
their sovereignty as American citizens, and occupy a sort of 
fiducial position to fulfill the trusts reposed in them. Contem¬ 
plating our representatives in Congress in this light, and to me 
it appears the true one, let us examine the effects of the act of 
1873, demonetizing silver. In the first place, it is an act of 
class legislation of the most dangerous character; it was an 
attempt, by legislative enactment, to give capital the control 
over labor; to give the owners of gold the ability to purchase 
property at half of its legitimate value; to injure, almost irre¬ 
parably, the debtor class for the benefit of the creditor; in that 
it compelled debtors to pay twice as much as they agreed to do 
when the debt was contracted; to render the public debt twice 
as burdensome as it would be if the terms of the original con¬ 
tract only were exacted; and consequently, so far as the payment 
of our national debt is concerned, to render our taxes doubly 
burdensome. It was also an attempt to destroy the constitu¬ 
tional character of money, for both gold and silver are by it 
recognized as money, because these alone possess the requisites 
to constitute mopey, as I have before shown. 

In my pamphlet I pointed out, to some extent, the injury it 
inflicted upon the debtor classes, by depreciating property one 
half below its true standard value, and compelling them to 
liquidate debts, contracted for property at imaginary prices, 
with property thus depreciated, thus in reality compelling them 
to pay four-fold what the debt was supposed to be when con¬ 
tracted. The evils of this law are so manifold that to enumer¬ 
ate them would occupy more space than I desire to devote to 
the subject. I will only allude to one so glaring, and of such 
magnitude, that all will readily see the necessity of repealing 
an act that should never have disgraced the record of the legis¬ 
lative department of our nation. Among the American pro¬ 
ducts will be found about $90,000,000 annually of the precious 
metals, nearly equally composed of gold and silver, the sil¬ 
ver probably slightly predominating. This production is 
more important in securing permanent prosperity than five 
or even ten times that amount of other products, for it 
remains, or should remain, a continually augmenting ad¬ 
vantage, while other products are consumed, and pass away 
almost as soon as they are produceJ. This unjust law doubles 
the value of the'gold product, and decreases largely that of the 
silver; thus benefiting one class millions annually, and injuring 
another class also millions annually; and the injured class 
equally worthy, and equally entitled to the benefits of a just 
and equitable legislation. 


14 


I do not suppose that the framers of this law foresaw the 
great evils that would result from it, for had they done so, it is 
not to be presumed they would have devised or consented to 
the passage of an act so adverse to the interests of the people 
whose interests it was their duty to protect and promote. When¬ 
ever I attempt to trace the evils under which we are suffering 
and have suffered so severely, to their source, like the'opening 
of Pandora’s box they all appear to emanate from one common 
cause. The depression of value to a gold, instead of a bi-metallic 
standard, has been the procuring cause of the railroad riots and 
consequent great loss of life and property, that swept like a besom 
of destruction over almost all sections of our country; and 
it is also the main, I might say the sole cause of the terrible 
evils resulting to the hundreds of thousands of families of the 
poor but industrious, laboring classes, in consequence of the 
almost universal failure of the savings institutions, by which 
this meritorious class have been robbed in a day of the 
hard - earnings of a life time, that they had set apart to 
sustain them in hours of sickness and ..against the infirmities 
of old age; and when I incontemplate the many evils result¬ 
ing from demonetizing silver, this appears to me the sad¬ 
dest of all, because it can in no wise be remedied. These 
banks undertook to pay a higher rate of interest than they 
could afford to, under existing circumstances, they must loan 
their deposits at a higher rate of interest than they were 
receiving and to do so they must run risks incident to a high 
rate of interest. Property had reached its highest speculative 
prices under an inflated paper currency, and loans made at one 
half its estimated value, have proved totally inadequate secur¬ 
ity for payment on a gold basis of the hundreds of millions 
that had thus been provided to meet the wants of the many 
thousands now rendered destitute. 

On former occasions I have spoken of the unconstitutionality 
of the act and subsequent examination and reflection have con¬ 
firmed my previous convictions. The only power Congress 
posesses on the currency question is given by article 5, Section 
8 of the Constitution, which is in these words : “ To coin money , 
regulate the value thereof, and of foreign coins, fix the standard of 
weights and measures By article 1, Section 10 of the Consti- 
sution, All states were debarred the power of coining money 

— of making anything but gold and silver coin a legal tender, 

— to pass any ex post facto law, or law impairing the obligation 
of contracts. Every department of the nation was prohibited 
from doing any of these acts, except empowered by the Consti¬ 
tution itself. All powers not delegated to the United States, 
nor prohibited by it to the state, are reserved to the states 
respectively or to the people. Pursuant to these powers, Con¬ 
gress proceeded to coin money — not to make it. On this point 
the Supreme Court of the United States has decided in one 


15 


case: “ It was not the intention of the framers of the Constitu¬ 
tion to give to Congress the power of making money, they have 
only been intrusted with the power of coining that which was 
money — gold and silver .” 

In another case the same court said: “The inhibition upon 
the States to coin money, and make any thing but gold and sil¬ 
ver a tender in payment of debts, must be read in connection 
with the grant of the coinage power to Congress.” If Congress 
has not power to make money, it can not have power to unmake 
that which is already money. On this point Daniel Webster, 
the great constitutional lawyer of America, said: “ Gold and 
silver are money by the law of the world abroad, and by the 
law of the land at home.” An eminent French writer says: 
“Gold and silver are constituted, by the nature of things, 
money, and universal money, independent of all conventions 
and all law.” And our Supreme Court, by one of its judges, 
declared, “ That money, in the constitutional sense, means coins 
of gold and silver.” If the inhibition above alluded to, in re¬ 
regard to the States making any thing but gold and silver a 
legal tender in payment of debts, extended to the coining of 
money, it also does, to the impairing of contracts —and when 
the bonds were given, they were payable in money simply 
as such, or in coin, meaning gold and silver coin combined— 
and Congress can have no constitutional power to alter the 
terms of a contract, or impair the rights of the parties as they 
existed at the time the contract was entered into, or any wise 
to abridge them. There is not a doubt entertained by any 
one, that had not the U. S. Court established the precedent, 
that greenbacks were a. legal tender in payment of contracts 
entered into' before the war, which contracts, at the time they 
were made, were payable only in coin, that the law of 1873 
would be decided unconstitutional and void. This prece¬ 
dent should no more be considered binding than would a 
promise to pay money, when the assassin’s knife was at your 
throat, if he would spare your life—nor than would be the plea of 
a homicide that the killing was justifiable, because on a former 
occasion, when driven to the wall, to save his own life he took 
that of his assailant. The life of the nation was in jeopardy, 
and this was supposed to be the only means by which it could 
be saved. If such a law was justifiable under the then existing 
circumstances, there is no reason why it should be so decided 
at this time. 

Believing it to be the duty of our representatives in Congress 
to pass laws that the necessities of the nation demand, and that 
the laboring classes pre-eminently need some safe depository 
for their hard-earned savings and that the issue of 3.65 inter¬ 
est-bearing scrip in redemption of, and in place of greenbacks 
would meet this demand; it appears to me that it should be 
done in the manner I have heretofore suggested; and believing 


LIB OF CONGRESS 

0 019 889 176 9 

16 

also, that while it is in our power to do so, provision should be 
made to avoid, as far as possible, all future fluctuations in value. 

An all-wise benefactor has placed within our reach the means of 
establishing a banking system which can never fluctuate, as I have 
heretofore endeavored to set forth, and if we neglect to profit 
by'ihis advantage we shall neglect that “ tide in the affairs of 
men ” which would float us safely and surely beyond all danger 
into the haven of security. These thoughts have been expressed 
as much with regard to the future interests of the nation as the 
present. When we cast a glance toward the dawning day that 
will witness the continent of North America one people, asso¬ 
ciated together from the conviction that their common interests 
and welfare require them to be united, and when the commercial 
and monetary transactions of the world shall center here, it is 
necessary that our financial standard shall be based on a founda¬ 
tion that all the world will accept and this can only be on gold 
and silver. Inasmuch as the law of 1873 demonetizes one of the 
necessary metals to secure this standard, and is, as I believe, 
unconstitutional; that it is oppressively injurious to the debtor 
class ; is contrary to the best interests of the people ; an act ren¬ 
dering labor tributary to capital; legislating in favor of one class 
to the serious injury of another; subversive of the principles 
upon which our government was established; greatly increasing 
the burden of our national debt, and rendering a return to 
specie payment more difficult, if not impossible, and especially 
because it is the procuring cause of the evils that we have en¬ 
dured since it became a law; it appears to me that every effort 
should be made to obtain its repeal at the earliest possible 
moment, and that it should no longer remain a blot upon the 
records of the legislative department of the nation. 

I close by saying, that he that is instrumental in 

SECURING A STABLE CURRENCY FOR AMERICA, BASED SOLELY 
ON THE BI-METALLIC STANDARD, WILL BE THE GREATEST 
BENEFACTOR THAT EVER TROD ITS SOIL. 

Chicago, Sept. 20, 1877 


SAMUEL HOARD. 







